. 

. . . . 

THE AITORNEY GENERAL 

OF TEXAS 

September 25, 1957 

Hon. Robert S. Calyert, OPINION NO. WW-262 

Comptrol,ler of Public Accounts 

Capitol Station Re: Whether deceased joint 

Austin, Texas tenant's interest is 

subject to inheritance 

Dear Mr. Calvert: 

tf;Etnder submitted 

. 

We quote the following excerpt from your letter 

requesting the opinion of this office on the above captioned matter. 

"An inheritance tax report has been filed 

with this department for the estate of Nellie 

R. Dillln who died intestate a resident of th'o 

Stata of Iowa by the decedent's two surviving 

sisters, Mrs. Cora B. Watts and Mary Lois Dlllin. 

"The only property owned by the deceased In 

the State of Texas is an undivided one-third (l/3) 

Interest in 320 acres in the John Mark Survey, 

Abstract 555, Harris County, fully described In 

a deed dated October 16, 1926, of record in Volume 

681, page 126, of the Harris County Deed Records, 

in which the father of Mrs. Cora B. Watts, Mary 

Lois Dlllln, Blanche T, Dillln and Nellie R. 

Dillin, conveyed the property to them, his four 

daughters, as joint tenants with tha express provision that upon the death or deaths of any of 

the four grantees the survivors of them would 

take the title to said property. Blanche T. 

Dlllln died in 1952, and her undivided onefourth (l/4) interest did not have sufficient 

value at that time to tax. The statut,ory exempions of the three surviving sisters exceeded the 

value of the Texas property." 

You state that the undivided one-third interest 

of Nellie R. Dlllin now exceeds the statutory exemption 

and request the opfnion of this office as to whether that 

interest was, upon passing to the survivors, subject to 

an inheritance tax, 
Hon. Robert S. Calvert Page 2 Opinion No. ww-262 

A joint tenancv ma?7 legally exist in Texas if 

expressly created by c&tract,- Chandler v. Kountze 

130 S.W. 2d 327 (Tex. Civ. App., 1939 Error ref.) Adams 

v. Jones, 258 S.W. 2d 402 (Tex. Civ. App., 1953). -The 

foll.owing definition of a joint tenancy is given in 14 

Am. Jur. 79, Cotenancy, Seti; 6. 

"An estate In joint tenancy Is one held 

by two or more persons jointly, with equal 

rights to share In its enjoyment during their 

lives, and having as its distinguishing 

feature the right of survivorship or jus 

accrescendi, by virtue of which the entire 

estate, upon the death of any of the joint 

tenants, goes to the survivors, and so on 

to the last survivor, who takes an estata 

of inheritance free and exempt from all 

charges made by his deceased co-tenants. . .' 

This being the nature of the estate which was ,. 

created by the deed from the father to the sisters, the 

question is whether on th,e death of Nellie A. Dillin - 

there was a taxable transfer under Article 7117, Vernon's 

Civil Statutes. The pertinent portions of Article 7117 

are the following: 

"All property within the jurisdiction 

of this State, . D .whfch shall. pass absolutely or in trust by will OP by the laws 

of descent or distribution of this or any 

other State, or by deed, grant, sale, or 

gift made or intended to take effect in 

possession or enjoyment after the death 

of the grantor or donor, shalLupon passing. e . be subject to a tax. 0 . o Any 

transfer made by a grantor, vendor, or 

donor, whether by deed, grant, sale, or 

gift, shall, unless shown to the contrary, 

be deemed to have been made in contemplation of death and subject to the same tax 

as herein provided if such transfer is 

made within two (23 years prior to the death 

of the grantor, vendor, or d,onor, of a 

material part of his estate, or fi the transfer made within such period is in the nature 

of a final distribution of property and 

without adaquate valuable consideration." 

-2- 
Hon. Robert S. Calvert Page 3 Opinion No. ww-262 

The general rule is that no tax may be imposed in 

respect to property acquired by survivorship in case of 

a joint tenancy under statutory provisions taxing transfers by will or by intestate laws. 85 C.J.S. 902, Taxation, Sec. 1143; Attorney General v. Clark, 110 N,E. 299 

(Mass. Sup, 1915); bl C J 1650 note 4a; In re.Rentz's 

Estate, 61 N. W. 2d 148'(Mi%. Sup. 1953) * 

In 4 C.C.H. Inheritance, Estate and Gift Tax Reporter, par. 1570B, p. 80,212, the following explanation 

of the general rule is given. 

.Jointly owned property is usually 

considered taxable only by speolfic statutory provision, because, owing to the fact 

that the interest of the decedent passes 

by right of survivorship there Is not a 

transfer by will or under the Intestate laws, 

so that a specific provision is necessary to 

bring such joint estates within the scope and 

operation of the act. The cases, In fact, 

are almost unanimous in holding that the 

interest of the survivor comes not by inheritance or succession, and that, accordingly 

there is no transfer under the intestate laws. 

The theory on which the taxation of such 

property Is justified is that, while the vesting of the entire estate by right of survlvorship is not an inheritance or succession, 

nevertheless the death of the decedent 

ordinarily makes the survivor the sole and 

undisputed owner. Such death enlarges, in 

practical effect, the quantity of his estate, 

for up to the death of the deceased joint 

owner it was within his power to have changed 

the joint estate to a tenancy in common, and 

hence death, from this point of view, is the 

generating source which consummates the joint 

estate in its full plentitude. But this 

theory is not wholly convincing or satisfactory, and, like the attempt to tax insurance and 

dower, rests on an implied assumption which 

does not stand the test oE analysis. The 

attempt to tax such interest may be criticized 

as perhaps an unwise extension of inheritance 

taxation to objects properly beyond Its reasonable scope. In addition to the Federal Government most of the states have a specific statutory 
L I 

. . 

Hon. Robert S. Calvert Page 4 Opinion No. WW-262 

provision making the vesting of joint estates by right of survivorship taxable. A 

number of states have no statutory provisions, and in most of these joint estates 

are not taxed, but in South Dakota, prior 

to the adoptlon of a specific provision 

taxing as to jointly held property, the 

taxing authorities taxed such interest as 

a matter of general constructfon. The 

soundness of such a construction is possibly 

open to doubt," 

You are therefore advised that no Inheritance 

tax accrued when the surviving sisters succeeded respectively to l/2 of the deceased sister's interest. 

SUMMARY 

The surviving joint tenants do not owe 

any inheritance tax upon the interest 

received at the death of a joint tenant. 

Yours very truly 

WILL WILSON 

Attorney General 

MMP/fb 

APPROVED: 

OPINION COMMITTEE: 

George P. Blackburn, Chairman 

Ralph Rash 

Wm. R. Hemphfll 

REVIEWFDFORTHEA'Pl'GRNEYGENF.RAL 

By: James N.Ludlum